Regency mines reports ‘good progress’ in operations update (RGM)

Regency Mines (LSE:RGM) provided an update on operations across its portfolio of assets and investments on Friday. The company reports improved coal production at Omega in Virginia, USA after moving a high wall miner to a new location at the end of 2018. The move should ensure a further three years of production with improved efficiency.

As Regency’s CEO Andrew Bell explained to MiningMaven in November, the move will ramp up production since the high wall miner has the capability to work two shifts, and the new location is closer to the customer, reducing transport costs.

There are currently two high wall miners in operation and Bell sees further improvements ahead, commenting`: ‘Once the second mining machine is moved to its new location we expect to see overall operations reaching a new level of turnover and profitability. Many other initiatives are under way to tune up performance and increase production, and we look to the future with confidence. 

Following the replacement of a cutter head to the machine this week, the operation now targets a sales level of 2,200 to 2,300 tons per day from production and third-party sales. Regency also highlights cost reductions in wages due to the implementation of a new shift pattern saving $80,000 every two weeks.

Meanwhile, in Papua New Guinea, progress is being made at Regency’s 50% owned Mambare nickel and cobalt project. The project had come unstuck following the failure of a former Joint Venture partner, however, Bell states activity has resumed:

At Mambare, the hiatus that followed the failure of our former joint venture partner is now over and a new and committed partner has come forward out of the old structure, just in time for us to meet the challenges of recovering nickel and cobalt demand. The outlook for the Mambare joint venture is transformed by this and we and our partners are stepping up activity with some significant initiatives that we hope will lead to the grant of a mining lease and may lead to DSO production.’

The joint venture is continuing work by developing a direct shipping (DSO) plan and a pre-feasibility study is expected to be completed in the coming months.

 Regency holds an 80% interested in Allied Energy Services Ltd (AES) via its 100% owned subsidiary Energy Storage Technologies Ltd (ESTEQ). AES is looking to develop a number of sites for private grid networks and combined heat and power provision.

The company has signed a pre-lease agreement over a 0.94 acre site in Knowsley capable of hosting a 49.5MW facility. A second fully permitted site 9MW site is in advanced negotiation. Further sites of 49.5MW and 4.5MW are also under negotiation.

Bell commented ‘At ESTEQ, AES and vanadium explorer DVY we are increasing our battery metal footprint and developing what may this year become a significant and cash flow-generative business at AES.’

Overall, great progress is being made and we thank shareholders for their support."  Bell concluded. 

Author: Stuart Langelaan

The Author does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the piece.
The Author has not been paid to produce this piece by the company or companies mentioned above.
Catalyst Information Services Ltd, the owner of MiningMaven.com, has not been paid for the production of this piece by the company or companies mentioned above.
MiningMaven.com and Catalyst Information Services Ltd are not responsible for its content or accuracy and do not share the views of the author.  News and research are not recommendations to deal, and investments may fall in value so that you could lose some or all of your investment. Past performance is not an indicator of future performance

Regency Mines shifts funding terms as it looks to maximise 2019 profitability (RGM)

Regency Mines (LSE:RGM) dipped 5pc to 0.28p on Monday morning after making several alterations to its funding arrangements, as a way of strengthening its operational focus this year. The company has partially repaid and restructured last year’s $1.6m convertible loan and has also taken on a new £676,000 loan with warrants.  

The new £676,000 convertible loan notes and accompanying warrants have been issued to institutional and high net worth investors. The notes can be converted into Regency shares at 0.42p each at any time until 30 May 2020. Each note has a denomination of £1,000, meaning they convert into 238,095 new Regency shares.

Each note holder also receives 119,046 warrants for each note subscribed. These entitle the holder to subscribe for one Regency share at a price of 0.6p at any time until 31 May 2021. All-in-all, up to £1.1m of notes may be issued in one or more tranches.

Elsewhere, Regency announced the partial repayment and restructuring of the $1.6m loan taken out from institutional investors in June last year. The business was lent the funds by Riverfort Global Opportunities and YA II PN for an initial term of six months. Regency could extend this loan for six further months in exchange for an additional $80,000 payment.

In today’s update, Regency said it executed a deed with the lenders last Friday to supplement and amend the terms of the loan.

Notably, this saw the business make a $580,000 repayment. The two lenders will now use $500,000 (£395,000) of this payment to subscribe for 395 of today’s newly issued convertible notes. Regency said it could make an additional $160,000 repayment from the proceeds of any third-party financing. This could include the issue of any further tranche of convertible notes.

Under the terms of the new deed, Regency will now make monthly $50,000 payments of principal and interest between May 2019 and February 2020. As a result of this extension, it must now pay the $80,000 extension fee and $20,000 of a $156,000 restructuring fee. In respect of this, its lenders have subscribed for c.22.5m new Regency shares at 0.35p each. Meanwhile, the balance of the restructuring fee becomes payable when the loan matures in February 2020. It will have an interest rate of 12pc per annum.

Regency’s chairman Andrew Bell said the May 2020 notes and changes to the $1.6m loan note have ‘shifted the main burden of any repayments into 2020’. He added that this was a ‘prerequisite’ for making the most of the numerous opportunities it has identified to boost cash flows and profitability.

The business manages a portfolio of mineral, oil and gas and energy storage projects. These includes a 50pc stake in the Mambare nickel-cobalt laterite deposit in Papua New Guinea and a 47pc position in Mining Equity Trust, which acquires and operates producing metallurgical coal assets in the US. It also owns an 8.9pc stake in Curzon Energy (LSE:CZN) as well as holdings in Whitecar, Allied Energy Services and Red Rock Resources (LSE:RRR), which is also chaired by Bell.

‘This clearer runway through 2019 and into next year gives us more time to unlock and build value, and reduces short-term uncertainty,’ said Bell. ‘Our primary focus is on growing cash flows from our coal operations through 2019 and generating cash remittances back into the parent company.  In other parts of our business, we see opportunities for profit also demanding our attention.’

Author: Daniel Flynn

The Author does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the piece.
The Author has not been paid to produce this piece by the company or companies mentioned above.
Catalyst Information Services Ltd, the owner of MiningMaven.com, has not been paid for the production of this piece by the company or companies mentioned above.
MiningMaven.com and Catalyst Information Services Ltd are not responsible for its content or accuracy and do not share the views of the author.  News and research are not recommendations to deal, and investments may fall in value so that you could lose some or all of your investment. Past performance is not an indicator of future performance

Regency Mines gives operational update on its energy storage focussed subsidiary EsTeq (RGM)

On Friday, Regency Mines (LSE:RGM) released an update on its 100% owned subsidiary, EsTeq Limited. The company was formed in 2017 to consolidate some of Regency's interests in the battery storage, battery metals, and energy storage technology space.

EsTeq holds a 5.584% interest in Whitecar Limited, a company renting white Tesla vehicles at six locations across the UK and Norway. The holding is currently worth £462k - up from the original £400k investment - and Regency reports that Whitecar is in discussions with a significant number of strategic and industry partners. Whitecar is a pioneer in the field of Electric Vehicle (EV) rentals and is preparing to expand into Germany in 2019.

EsTeq has also committed £50k to the development of a new project in energy storage and trading, and grid backup, under the name Allied Energy Services Ltd. The company owns 80% of Allied Energy which has secured land lease options over a 0.94 acre site in Knowsley capable of hosting a 20MW facility. Allied Energy has also secured options over three farmland sites in the Liverpool area, each capable of hosting a 25MW energy generating and storage facility.

In addition, Allied Energy has agreed Heads of Terms with a leading property, transport and logistics company for an industrial site in Scotland. The two hectare site is capable of hosting an initial 50MW energy generating and storage facility. 

The pre-planning process is underway for all the aforementioned sites with a view to commencing construction of the first facility during Q1 2019. The company is working with battery storage technology and combined heat and power manufacturing companies to devise optimal layouts for each facility.

Early discussions are in progress with potential project finance partners and potential blue-chip clients on the potential of supplying their long-term energy needs. Allied Energy is also in preliminary discussions with a potential JV partner affiliated with Oxford University for the co-location of a Research and Development facility with potential financial support from Scottish Enterprise. 

Joseph Jayaraj, EsTeq Executive Director, comments: "Whitecar continues to make progress. At Allied Energy, operations have progressed well during 2018, culminating in the first 20MW project site in Liverpool secured with a long-term lease and planning consent.  Grid connection and project finance are expected to follow during Q1 2019.

We are excited by the potential of Esteq's maiden project site, which, together with a number of pipeline projects on the horizon, will assist in better managing the increased demands on UK energy infrastructure".

 Author: Stuart Langelaan

The Author does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the piece.
The Author has not been paid to produce this piece by the company or companies mentioned above.
Catalyst Information Services Ltd, the owner of MiningMaven.com, has not been paid for the production of this piece by the company or companies mentioned above.
MiningMaven.com and Catalyst Information Services Ltd are not responsible for its content or accuracy and do not share the views of the author.  News and research are not recommendations to deal, and investments may fall in value so that you could lose some or all of your investment. Past performance is not an indicator of future performance